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IP & Technology Review 18 April 2016

In its recent judgement R 17/745 concerning privacy in working life, the Turku Court of Appeal ruled on employer's right to retrieve and open an employee’s work emails after the employee has resigned. The Court found that by forwarding e-mails from the employee's work account to their own accounts without complying with the statutory procedural provisions, the employer’s representatives had violated the of Act on the Protection of Privacy in Working Life (759/2004, as amended).

The Court held that due to the fundamental nature of privacy, deviating from the statutory procedural provisions requires explicit consent of the employee and tacit consent cannot be deemed sufficient. It was undisputed in the case that the employer's representatives had failed to comply with the required procedures even if the allegations did not concern retrieving or opening the employee’s private e-mails.

The Court provided further clarification on what can be deemed as an explicit consent. In the case, the employee had agreed in an e-mail that for a period of nine days the private messages sent to his work account would be forwarded to his personal e-mail address. However, as the explicit consent to access his work account was restricted to a period of nine days following his resignation, the e-mail could not be regarded as permission to access his account still several months later. The Court also found that in this case the employer's IT Policy did not include the employee’s consent to examine or read his work e-mails in the event of resignation. The Court also held that in any event the mere reception of such document cannot constitute consent if the employee's familiarization with the terms and conditions is not confirmed in any way.

The takeaway from this ruling is that even in situations giving rise to the employers’ right to access employee's work e-mails under the Act on Protection of Privacy in Working Life, the procedural preconditions for exercising this right need to be strictly followed unless otherwise is explicitly agreed with the employee.

European Parliament approved the new Trade Secrets Directive on 14 April 2016. The new Directive will introduce a common framework for the protection of trade secrets in the EU. The aim of the Directive is to help businesses obtain similar legal redress against theft and misuse of their trade secrets throughout the EU, and thus create companies a more predictable and coherent legal environment for the protection of their trade secrets.

A 'trade secret' is defined as information which is secret, has commercial value because it is secret, and has been subject to reasonable efforts to remain secret. Furthermore, the Directive provides for lawful and unlawful ways to use and disclose trade secrets. Lawful acquisition of a trade secret includes, inter alia, independent discovery or creation as well as so-called reverse engineering. Trade secrets are unlawfully used when, for example, acquired through unauthorized access or copying of documents, or through a breach of a confidentiality agreement.

The Directive also sets forth remedies and sanctions for violations, and provides for precautionary measures and the possibility to claim damages. However, the Directive only applies to civil matters, and thus the purpose of the Directive is not to change the existing safeguards and means provided in criminal law.

The Directive primarily sets only a minimum level of harmonization allowing Member States to maintain some national leeway. However, the Directive also contains provisions of maximum harmonization including essential definitions and safeguards for the application of interim measures, injunctions and corrective measures. Moreover, the Directive balances the protection of trade secrets against other interests, such as the rights of employees, journalists and whistleblowers. For more information about the relation between trade secrets and employee privacy, see Roschier's article Employee privacy and protection of trade secrets at odds in Finland.

The Directive shall be implemented into national legislations in two years. However, it is already a good time for companies to review the efficiency and scope of their internal policies and contracts as regards trade secrets.

The Supreme Court's judgement (KKO:2016:16) concerned the conflict between a trademark owner's exclusive right and the right to use a sign with similar features to describe the quality of the service. In the case, Verkkokauppa.com Oyj claimed that Oy Waltib Ab's use of the domain name veneilijanverkkokauppa.com and the sign containing the text, "Veneilijän verkkokauppa.com" in its online retail business infringed its well-known word mark Verkkokauppa.com registered in 2004.

In the lower instances, both the District Court and the Court of Appeal had found that although the word mark Verkkokauppa.com was well-known, Waltib's use of the signs did not create a likelihood of confusion with it.

Similarly to the lower courts, the Supreme Court found that Verkkokauppa.com's trademark was well-known despite the relatively short registration duration of six years. Since Verkkokauppa.com's trademark and Waltib's signs were similar and they also refer to similar services and to some extent similar products, the Supreme Court held that the condition set by the CJEU jurisprudence that the similarity between the sign and the well-known trademark leads to the relevant public associating the sign with the trademark was met.

The Supreme Court found it evident that Waltib had unjustly exploited the distinctive character or reputation of Verkkokauppa.com's well-known trademark. The Supreme Court held that due to the fact that the trademark was previously known to Waltib's customers, the average consumer may be left under the impression that the word ''Veneilijän'' refers to a separate category of Verkkokauppa.com's products. The Supreme Court further emphasized that, in its view, Waltib had used the trademark in a way that is likely to strengthen the association, i.e. writing the word "verkkokauppa.com" separately using red letters which resemble Verkkokauppa.com's marketing. Furthermore, Waltib started using its sign only after Verkkokauppa.com's trademark had already become well-known.

Although the ruling does not mean that the word "verkkokauppa" cannot be used to describe the quality of the service, businesses should exercise caution when using the word as part of their sign. Some relevant factors to consider are; (i) whether the word stands out from the rest of the sign, (ii) whether the sign bears resemblance to the well-known trademark, and (iii) whether the offered services or products are similar.

The Swedish Supreme Court found that Section 24 of the Swedish Act on Copyright in Literary and Artistic Works (1960:729, as amended) (the "Act"), according to which works of art may be reproduced in pictorial form (Sw: avbilda) if they are inter alia permanently situated on or at a public outdoor location, does not apply to situations where photographs of such works of art are made available to the public through a database on the internet. The Supreme Court reached this conclusion in its decision (Ö 849-15) on 4 April 2016, after a judgement of the Stockholm District Court in a case betweenBildupphovsrätt i Sverige / The Visual Copyright Society in Sweden ("BUS") and Wikimedia Sverige.

Wikimedia is a non-profit association that inter alia operates the domain "offentligkonst.se". The domain contains a user generated database with information regarding public works of art in Sweden and also used to include photographs of these works of art. BUS is a cooperative association that represents visual artists in relation to common copyright issues.

BUS had initiated proceedings against Wikimedia in the Stockholm District Court on the basis of copyright infringement by making certain works of art available to the public through the database without the consent from the artists of the works. In its defense, Wikimedia claimed that the exploitation was allowed under Section 24 of the Act. After reviewing the case, the Stockholm District Court turned to the Supreme Court for the interpretation regarding the relevant aspects of Section 24.

The Supreme Court found that the exemption from the rights of a copyright owner stipulated in Section 24 of the Act did not include making photographs available in the way that Wikimedia had done. The works of art had been made available through a publically accessible, digital database, which was not considered to be an insignificant commercial value. The Supreme Court found that this commercial value belonged to the copyright owners.

Mr Liffers sued Mandarina and Mediaset for IP infringement before a Madrid Court seeking damages in the amount of EUR 6,740, together with an additional sum of EUR 10,000 as compensation for the moral prejudice which he claimed to have suffered. The case eventually reached the Supreme Court of Spain, which in turn sent a referral on the question to the CJEU.

The CJEU found that although compensation for moral prejudice is not explicitly mentioned in Article 13(1)(b), the wording of said Article does not exclude moral prejudice from being taken into account. Thus, the provision allows other elements besides material damage, such as moral prejudice, to be included to the compensated amount. The CJEU maintained that said provision shall be interpreted taking into account the context and the objectives of the Enforcement Directive.

In the light of the foregoing, the CJEU held that Article 13(1)(a) established the principle that the calculation of damages must seek to ensure that the injured party is compensated in full for the 'actual prejudice suffered', which – in addition to the material damage calculated based on Article 13(1)(b) – also includes any moral prejudice.

The Swedish Market Court has delivered a judgement in case MD 2016:5 between the Swedish Consumer Ombudsman and Vitaelab AB that relates to the Regulation (EC) No 1924/2006 on Nutrition and Health Claims Made on Foods (the "Regulation"). In the judgement of 24 March 2016, the Market Court prohibited Vitaelab from making certain claims when marketing the dietary supplement VitaePro, as well as other such supplements with essentially the same compounds.

The related marketing had been communicated through customers describing the physiological effects they had experienced from using VitaePro, published on Vitaelab's website. The Consumer Ombudsman initiated an inspection matter (Sw: tillsynsärende) against the marketing in 2011 and consequently filed a suit against Vitaelab in 2013, claiming that the marketing was not allowed under the Regulation.

The Market Court clarified that only certain types of health claims made in connection with foods were permitted under the Regulation, and these claims can be found in the Annex to the Regulation. As to the marketing of VitaePro, the Market Court concluded that the customer testimonies had contained impermissible claims in relation to the effects of consuming VitaePro. The customer testimonies had described effects such as increased energy and preservation of strength and mobility, and such claims were not allowed under the Annex. As the Market Court considered that the marketing also to noticeably affects or is likely to affect the recipient's ability to make well founded commercial decisions, it was found to be unfair and thus forbidden.

The judgement offers guidance on what to be aware of when making nutrition and health claims in relation the marketing of foods. As long as the claims are approved under the Annex, they shall be deemed permitted.

The Finnish Market Court ruled two related applications (MAO 146/16 and 147/16) inadmissible on 10 March 2016 due to the fact that the applicant, Copyright Collections Ltd, did not demonstrate that it has a legal standing in the matters. Copyright Collections applied for access to the personal data of the owners of certain IP-addresses that had been used for unauthorized distribution of movies. The applicant claimed that it had acquired the rights to the movies through a license agreement with a film company NU Image, Inc. However, the Market Court found that Millenniums Films, a subsidiary of NU Image, shall be deemed the proper copyright owner since its name appears in the marketing and other materials. According to the Court, the applicant had failed to demonstrate that NU Image produced the films or that the applicant has an agreement with Millennium Films.

The European Parliament has approved the General Data Protection Regulation on 14 April 2016. The Regulation raises the bar for data protection in the EU and brings many significant changes to all companies processing personal data. Roschier has published a briefing note discussing the effects of the Regulation and the measures that companies should adopt in order to comply. The Regulation will be applied from May 2018 which means that companies must take a careful look at how they process personal data during the transitional period to ensure compliance.

The European Parliament adopted the Passenger Name Record (PNR) Directive on 14 April 2016. The directive obliges air carriers to collect passenger data from all flights between EU and third countries in order to prevent and investigate terrorism and serious crimes. The data will be stored for five years in Passenger Information Units ('PIUs') established by member states. However, the data will be stripped of identifying elements such as names and contact details after six months. When implementing the Directive, member states may also extend the data collection to EU internal flights and travel agencies and tour operators that manage flight booking. Furthermore, in order to protect personal data and privacy of passengers, the Directive contains safeguards such as prohibition to process sensitive personal data and limitations to access full, identifying PNR data.

As a next step the European Council will formally adopt the PNR Directive. After the final adoption, member states will have two years to transpose the Directive into national laws.

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